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November 2020

4 Steps You Can Take to Start Preparing Your 2020 Tax Return

4 Steps You Can Take to Start Preparing Your 2020 Tax Return

December is almost here, the best season to celebrate and also the ideal moment to start working on your 2020 tax return. Here are four steps you can take now to ensure that the process is as easy and simple as possible.

Check Your Withholding

First, make sure that your tax withholding is correct. This can be done easily using the Tax Withholding Estimator from the IRS.

Checking your withholding is important because it helps you avoid unexpected tax bills when you file your 2020 tax return. These are some cases when checking your withholding is particularly important:

  • Your refund was smaller than expected when you filed your 2019 taxes this year.
  • You owed an unexpected tax bill last year.
  • If you got married, bought a house, had a child, or adopted a child.

Get The Documents You Need for Your 2020 Tax Return

Having the right documents on hand makes things a lot easier when you prepare your tax return. These are some of the documents you should start gathering:

  • 2019 tax return.
  • Form W-2 from your employer.
  • Form 1099 from banks and other payers.
  • Forms 1095-A if you claim the premium tax credit.
  • Notice 1444 that you received with your Economic Impact Payment.

Keep in mind that most income is taxable, including income from the gig economy and virtual currencies, so don’t forget to get any documents related to these types of earnings as well.

Confirm Your Email and Mailing Addresses

You want to get all the forms you need on time, so it’s always a good idea to confirm that your employer and banks, as well as any other payers, have your current email and mailing addresses.

Make Sure Your ITIN Hasn’t Expired

Some Individual Tax Identification Numbers, or ITINs, expire at the end of 2020. They include:

  • All ITINs not used at least once on a federal tax return during the last three years.
  • All ITINs issued before 2013 with middle digits 88 (for example, 9XX-88-XXXX)
  • ITINs with middle digits 90, 91, 92, 94, 95, 96, 97, 98 or 99 that were assigned before 2013 and have not been used.

If your ITIN expires, then you can submit Form W-7 to the IRS to renew it. Taking this step before filing your return will help you avoid delays in your refund and stay eligible for certain tax credits.

More Tips About Taxes

Learning more about taxes is always a smart move. Here are some previous posts you may find interesting.

Contact the Experts at JT Tax Services

Need help preparing your taxes? At JT Tax Services we have the experience, the knowledge, and the drive to assist you. We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email, telephone, or through our social media accounts on FacebookTwitter, and LinkedIn to learn more about our services.

The Scam You Should be Aware of During This Holiday Season

Remember: Gift Cards are NOT to Be Used to Make Tax Payments

Gift cards are a convenient option people use every holiday season. It makes sense: these cards allow you to give a gift to someone you care about without running the risk of giving them something they don’t like. However, gift cards are NOT to be used to make tax payments. Read on to learn how to identify, avoid, and report this type of scam.

How the Scam Works

Scammers often impersonate the IRS or other reputable institution and try to get people to pay fake tax bills with prepaid gift cards. This may sound absurd on its face (and it is), but a lot of people fall for this scheme every year, so it’s better to be prepared.

Criminals prefer gift cards because they are difficult to trace or recover when the transaction has been completed. So once you have provided them with the information they need, it’s very difficult to get your money back.

Pay Attention to These Red Flags

These are some red flags that can help you identify scammers using this scheme:

  • The contact you unsolicited either by phone, email, text, or social media.
  • Scammers may tell you that you are somehow linked to illegal activity (for example, that your identity has been stolen and used for fraudulent purposes).
  • They use threats and/or harassment to get you to pay a fake tax penalty.
  • They instruct you to buy gift cards from different stores.
  • Once you buy the gift cards, they ask you to provide the gift card number and PIN.

How to Report a Gift Card Scam Attempt

If you believe you have been targeted by scammers, you can use the IRS Impersonation Scam Reporting website or call 800-366-4484.

In the case of phone scams, you can report them to the Federal Trade Commission, making sure to add “IRS phone scam” in the notes.

If you receive threatening or harassing phone calls, you can report them directly to the IRS to phishing@IRS.gov, including the phrase “IRS phone scam” in the subject line.

More Tips About Taxes

Learning more about the options available to you as a taxpayer is more important than ever. Check out these previous posts for more useful tax tips:

Contact the Experts at JT Tax Services

Looking for expert, dependable advice on taxes? At JT Tax Services we have the experience, the knowledge, and the drive to assist you. We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email, telephone, or through our social media accounts on FacebookTwitter, and LinkedIn to learn more about our services.

IRS Announces New Relief Options for Taxpayers Impacted by COVID-19

IRS Announces New Relief Options for Taxpayers Impacted by COVID-19

The IRS announced this week its Taxpayer Relief Initiative, a series of measures designed to help taxpayers impacted by the COVID-19 pandemic. The provisions include more flexible terms to resolve tax liabilities and make it easier for taxpayers to set up installment agreements.

  • If you qualify for a short-term payment plan you may now have up to 180 days to resolve your tax liabilities instead of 120.
  • The IRS may be flexible if you are temporarily unable to meet the terms of an accepted Offer in Compromise.
  • If you owe less than $250,000 you may be able to set up an installment agreement without providing a financial statement if your monthly payment proposal is sufficient.
  • Those taxpayers who owe only for the 2019 tax year and owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS.
  • Qualified taxpayers with existing Direct Debit Installment Agreements may now be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

These are other aspects of the Taxpayer Relief Initiative that are worth keeping in mind:

  • You can request to temporarily delay collection. If the IRS determines that you are unable to pay, it may delay the collection process.
  • You may settle your tax bill for less than the amount you owe by submitting an Offer in Compromise. To check if you are eligible, use this online tool: Offer in Compromise Pre-Qualifier.
  • Some taxpayers may get relief from penalties. You may qualify for reasonable cause assistance if you have failure to file, pay, and deposit penalties. Additionally, first-time penalty relief is available if you have never been subject to tax penalties before.

More Tips About Taxes

Learning more about the options available to you as a taxpayer is more important than ever. Check out these previous posts for more useful tax tips:

Contact the Experts at JT Tax Services

Looking for expert, dependable advice on taxes? At JT Tax Services we have the experience, the knowledge, and the drive to assist you. We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email, telephone, or through our social media accounts on FacebookTwitter, and LinkedIn to learn more about our services.